Student loans company boss

ChiefGrasscutter

I don't get how he ever managed it in the first place - to get paid via a company?

Surely he would be 'done' under the IR35 rules - that he worked 100% for the company and therefore he was a full time employee and subject to PAYE.....

chrismac1

Google "Dave Hartnett" - former head of HMRC. Job status - contractor!!!

Pennywise

Just wait for all the others to be shaken out of the woodwork. It's going to be a bloodbath.

Murdina

It is beyond belief. I hope HMRC now reviews his and any other cases and has a real go at their "personal" companies.

Not that I have anything against student finance who are of course always a pleasure to deal with and answer all your queries quickly, efficiently and clearly....................(or not)

agrinnall

ChiefGrasscutter wrote: »

I don't get how he ever managed it in the first place - to get paid via a company?

Surely he would be 'done' under the IR35 rules - that he worked 100% for the company and therefore he was a full time employee and subject to PAYE.....

They are two different things though. Whether he should have been an employee of SLC is down to what HMRC decided, and it appears that they decided he didn't have to be and could work through his limited company (my own view is that this decision was wrong, and possibly politically influenced). Having done that the question of IR35 arises, which if he follows it means that in fact as much tax and NI would be paid as it would have been if he was an employee of SLC. I heard that he was IR35 compliant, but I have my doubts because there's not much advantage over being an employee so I suspect that he was actually paying dividends but the story has been spun to make out that he is not avoiding taxes. From what I gather (I'm sure Chrismac1 will confirm this as much of the info is from his posts) IR35 has become pretty much unenforceable due to a string of defeats for HMRC in the courts, so you'd be mad to be compliant these days.

zygurat789

Being the head of a government agency may not be a very well paid job, but it must look good on a CV. I find it hard to believe that anyone would turn it down for the sake of a few bob saved on a tax bill. I find it incredible that the civil service would accept such an arrangement, unless they'er all at it.
No wonder HMRC and the Treasury never suceeded in stopping income shifting, they are all at it.

Pennywise

2sides2everystory wrote: »

Here's the same story looked at through another pair of glasses ... spot the loser ?

But that doesn't highlight the opportunity of his wife being a co-director and shareholder, potentially using her annual tax free allowance and basic rate band, doubling the £40k to £80k. It also doesn't highlight the tax saving opportunity of leaving some money in the company and therefore not paying the higher rate tax as if paid by dividend, and instead paying only 10% capital gains tax if he built up the money in the company and then closed it down and took the money as capital.

So it sames "both" sides are being economical with the truth doesn't it!

What would be interesting to know is whether this guy was enjoying other "perks" of public office, such as being enrolled in a gold plate public sector pension and whether he'd be eligible for a huge redundancy pay off when he leaves the student loan company?

It's about time this issue was highlighted. For far too long IT contractors have been attacked for using personal service companies, but this kind of thing is widely used by politicans (i.e. Milliband has his own service company doing the same), and BBC presenters, sports personalities, etc. It's massive and maybe now it's become mainstream in the media, the Govt will come up with a fair response rather than the stupid knee jerk reaction concentrated on IT consultants (IR35).

chrismac1

Well the latest noises from Cameron and Clegg talk of "General Anti-Avoidance Procedures". These are the sort of measures in place in countries like Canada and New Zealand, who took one look at what Labour and HMRC were doing on IR35 and concluded - rightly - "What a bunch of fools!"

Having said that, my contractor clients are, in my view, all "IR35-proof" and there is a general view in the sector that having sent IR35 packing with its tail between its legs any replacement is more of a threat than opportunity.

The top people in the public sector seem to think they are above the trials their staff are going through. Hester is 88% public sector, he can have his bonus as and when the RBS share price is 25% higher than when he was hired and not a moment sooner. And all public sector folk currently getting £100k or more through service companies should be immediately go on to PAYE. If they don't like that, they can resign and that's another one off the headcount.